Residential values stabilise in Dubai’s established and prime areas

Residential values  stabilise in certain established and prime residential areas such as Downtown Dubai and Emirates Living (Lakes, and Meadows), according to the May 2011 sales guide released today by Landmark Advisory, one of the leading real estate consultancy companies in the Middle East.

Based on transactional data as well as third-party research, the new report shows that capital values continue to decline in tertiary areas with an imbalance between supply and demand, such as International City and Discovery Gardens. However, according to Saeed Hashmi, Head of Valuation & Advisory, Landmark Advisory, Dubai’s most prime locations “continue to witness signs of stability due to restricted supply, and demand remaining buoyant”.

Due to a combination of relocation demand from other Emirates in the UAE, and people within Dubai looking to take advantage of declining prices, an increase in sales activity has occurred in key locations such as Jumeirah Lakes Towers and Dubai Marina, however, due to the existing and future supply pipeline of medium quality buildings have yet to realise stability in value, whereas higher quality buildings are closer to witnessing price stability.

Throughout Dubai a clear trend has emerged, as we predicted.  For the residential sector; good locations, well-established communities and high-quality properties are performing better than their counterparts. This is further intensified by that fact that there are considerably more apartments in weaker locations of a medium quality coming online throughout 2011.

Villa prices have performed better than apartments, showing little change since last quarter. This stabilisation has again occurred in established communities such as Lakes and Meadows, due to an increase in demand for well-maintained villas with factors for consideration including specific types, larger plot sizes and good views.

In regards to Abu Dhabi, Landmark Advisory’s recent sales guide displays a small decline for apartments located within the city’s investment zones, including Al Reem’s Marina Square and Al Raha Beach. Hashmi states that, “These declines in value have resulted due to handovers occurring and a secondary market beginning to evolve in Abu Dhabi’s investment sectors due to an increase in supply.”